About Patrick Donohue

Posts by Patrick Donohue:

Habits for Fundraising Success


Over the years I have worked with and spoken to over 100 small business executives about their capital formation activities.  Honestly, most of them were not successful in meeting their fundraising goal(s). For a capitalist like me, that is difficult to witness.
The stark reality is that the high majority of small businesses and start-ups have to settle for far less capital they had envisioned would fuel success. It wasn’t for a lack of trying…

 

Where I have witnessed people succeed:
–       Getting outside of their existing network.
–       Focusing on the natives. Rarely do people invest in something they don’t have a personal connection to / or knowledge of.

 

 

 

 

 

 

 

 

 

 

 

 
These may sound obvious, but the fundraising desert is littered with skeletons of those that thought they could dazzle and educate investors that have no familiarity with the product or industry.

 

 

Success Factors:
–       Passion. This isn’t a tough one for most entrepreneurs, but using it appropriately is much more rare.
–       A team. Successful fundraisers are completing the task with at least two people.
–       A roadmap. The best deal makers know and understand the timeframes to execute the deal at hand.

 

 

Patrick


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Accelerate Funding Where Technology Meets Reputation




This December 6th, come on out to CoCoMSP and watch INVESTyR Co-founders Patrick Donohue & Phil Pogge provide an interactive seminar on why digital media is forever changing the world of finance. The seminar unveils tactics on how to use digital media to achieve your business goals and accelerate capital events.  We guarantee participants will walk away with the insights on modern tools to use when raising capital and directly sourcing relationships with investors, dealflow and financiers.

 

P.S.- For our loyal blog readers like yourself, please accept our gift of 50% off by using promo code BLOG

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Agile Corporate Finance


I am a big fan of agile development and lean startup practices. Failing fast is more important today than ever.
The same is true for finding investors. Just like you need to evolve your product, you need to cycle though a lot of people to find and engage the right relationships.

 

 

There was a day when I would say business owners only get one bite at the apple when approaching investors. These were also the days when I thought a company had to have a robust pro forma and a complete business plan.

 

No More.
Today, entrepreneurs must interface with potential investors in a multifaceted way – long before everything is picture perfect. Gone are the days of business plans. Today, it is about agile corporate finance – business model canvases and minimally viable products that can demonstrate social proof.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If anything in this post is new to you, I recommend viewing these resources:
Lean StartUp
Business Model Canvas
TED talk on celebrating failure

 

 

Learn more about Agile Pitching with our new course “Agile Pitching: It’s More than Just a Pitch Deck

 

 

Patrick Donohue


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Investors Want You to Find Them


Have you seen him? He is the angel investor who wants to write a check, but he doesn’t know you. You’re lost with a lack of resources and feeling pinched on time. Money’s gotta come in or your dreams are going out the door. “Where’s Waldo?!”
So let’s help you connect the dots. Put two and two together. People only invest in people they like. Angel investors are capitalists that back passionate entrepreneurs to give them resources to execute. Waldo wants to find you. He’s on Twitter, LinkedIn, and AngelList. In fact, he’s trying to make this so easy for you, he’s telling you exactly what he’s looking for.

 

"What I'm looking for"

An example of “What I’m looking for” on AngelList

 

 

 

 

 

 

If you want to be a successful entrepreneur, you need to create your networks, meet investors, build rapport, demonstrate thought leadership and prove to them you are worthy of their money. Nobody, we repeat, NOBODY can do this for you. So lace up your running shoes and put on your game face because Waldo is out there and you just need to find him. And use technology to help expedite your journey.
Want some tactical insights? Check out our latest Udemy course, Learn to Find Investors Quickly!
~ Patrick Donohue & Jason Martin


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Make the Leap to Become an Entrepreneur


As Red Bull Strato’s jumper, Felix Baumgartner said, “When I was standing there on top of the world so humble, you are not thinking about breaking records. I was thinking about coming back alive. You do not want to die in front of your parents and all these people….I thought ‘please God, don’t let me down.”

I love this quote from Felix for many reasons, but the main being he is brutally honest describing his feelings of risk. This type of risk is felt in many facets of life, whether you are a music artist performing at the Super Bowl, a startup founder launching your first product, or like Felix, someone trying to break a record for an advancement in science.

 

Everyone is always watching. Yes, you get the thrill of 100,000 fans singing to your song, write-ups in major tech blogs, and your name in the Guinness Book of World Records. But what if it doesn’t happen like you dreamed? What if you fall flat on your face? Once you are doing something monumental that took hours of practice, development or research, it becomes a new kind of risk. The best kind of risk is taking a chance that no one else has the courage to do.

 

When you have the feeling that it’s no longer about your goal, that it’s bigger than that, then you know you are taking a real risk. One that makes you think ‘God, please don’t let me down’ is one that any determined entrepreneur has felt many times. The feeling of quitting your salary job, not sure if you can pay the bills, “what the hell am I doing?” kind of risk.
Once you prepare yourself for any risky endeavor, you calculate the pros/cons of the action and what may be the potential result. To become an entrepreneur, learn to take small risks on a daily basis. After taking so many small risks, you’ll build these skills and become a better decision maker. An entrepreneur takes a chance with risk in mind, understanding the potential backlash of a failed attempt or if you’re ever so lucky, a payout worth its weight in gold. An entrepreneur feeds off the excitement, the thrill, the uncertainty of what the future holds.

 

Most entrepreneurs fail. But to be an entrepreneur is a success in itself. Because you are willing to take the chance, to build something greater than yourself and in exchange for your risk taking ability. You know that you are one of the few in America, that are true change agents, creating jobs, giving back to the community and inspiring those to follow their dreams.

 

Felix had the dream to break the sound barrier by going up to the highest point for a human at the edge of space, and then jump. Want to be an entrepreneur? Leap and enjoy the ride.

 

 

Jason Martin


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What Convinces is Conviction

“What convinces is conviction. Believe in the argument you’re advancing. If you don’t you’re as good as dead. The other person will sense that something isn’t there, and no chain of reasoning, no matter how logical or elegant or brilliant, will win your case for you.” Lyndon B. Johnson

 


What does your story say about your product, investors and team? Are you delivering the message in a way that resonates with your customers? A major key to effective communication is focusing on the core benefit and not the features. Ask yourself this question in the context from your customers eyes, “What’s in it for me?” If your team doesn’t clarify how you’re making their life easier, there’s a problem that needs to be identified.

 

Jason Martin



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Accelerate Raising Capital with Twitter


 

By this time, with all the attention in the news and current events, I’m assuming you’ve probably heard of Twitter. In the last five years, Twitter has amassed itself as the world’s best way to share and receive instant information. With over 500 million users, it has been proven as a valuable way to send and receive instant information.

 

If you’re an entrepreneur who has never been interested in sending out a tweet or one who can’t stop starting fires on your smartphone keyboard because you send so many, we’ve got something for you. With today’s official launch of our first Startup Play, “How to Accelerate Raising Capital with Twitter” I’m going to explain how it can help you raise money for your business just by having a strategy with your tweets.

 

Twitter has an audience that’s more than just teenagers following Justin Bieber or businesses shoving shameless promos in your face.  There’s a strong presence of tech entrepreneurs and angel/VC investors. Now I don’t have any official numbers for this, but I’ve heard something along the lines of 15% of entrepreneurs have had some sort of dialogue with an investor on Twitter. This number can be significantly higher with the right course of action.

 

In our Startup Play, we teach you things from branding your Twitter profile to seeking and engaging investors. Within 3 weeks you will be primed and ready to reach out to potential suitors for your business. Check out the Startup Play here, “How to Accelerate Raising Capital with Twitter”

 

Jason Martin

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Inside The BoomStartup Accelerator: Purveyors of The Utah Entrepreneurial Dream

How many people do you know that have had an idea that they thought will change the world?

Countless times, we’ve heard everyday folks with a small idea or dream try to change the ways things are done. Many of them have experienced a problem first hand that they can’t handle anymore! They set out to create a solution.

These aspiring entrepreneurs are faced with a tough challenge. Work their full time day job and try to moonlight their idea on the side. It’s a difficult route. Many people have families, after work activities or commitments that make it even harder to pursue their idea.

It’s a predictable scenario where the majority of individuals will fail. Not due to a lack of intelligence, perseverance or size of the opportunity, but typically to burnout. Getting an idea to snowball into something of value takes a lot of work. Especially time. And to be able to commit time to a new venture, means you have to be able to dedicate your resources and go all in.

But how does someone turn an idea into a full time adventure?

In communities all around the world, individuals in scenarios like this are starting to group together and find ways to do such a thing. A lot of times, you’ll see people set up shop at coworking spaces where freelancers, internet entrepreneurs or people looking to work in a fun environment get together. This helps not only the entrepreneurs, but also the community. Building a sustainable entrepreneurial environment and ecosystem is one of the most impactful things that can set a community up for strong economic activity for years to come.

It’s easy to be in a location that has excelled in a specific industry, like Silicon Valley is to internet startups. But what about the other majority of places that maybe just haven’t peaked to their potential. That’s where the modern day startup ecosystem visionaries come in to play.

I was fortunate enough to interview, Robb Kunz, of BoomStartup in Utah. Robb is the epitome of an entrepreneur who is on a mission for the greater good of his community in Salt Lake City and beyond. One would think that one successful venture would be enough for a career. Well, the true test of an entrepreneur is one who gives back to his community. We call it ‘Entrepreneurial Karma’. After years of running his own successful internet company, Robb decided to give back. He chose to help his fellow entrepreneurs by providing the mentorship and capital needed to get them up and running.

BoomStartup

Robb filled me in on the most important reasons why BoomStartup was created. He says, “The first was to provide entrepreneurs/founders a better way to start a company and get it funded; Second, to provide investors a better vehicle to fund startups whilst at the same time providing them a more diverse investment strategy across this high risk investment “class”.

Not only does Robb care deeply about entrepreneurs and angel investors, but he also has a mission to build a better ecosystem across the entire state of Utah. The vision behind BoomStartup is to continue building a thriving community and launch more vertical-focused accelerators with enterprise partners that they have across the state.

They have been fortunate to be a part of the local tech scene in Salt Lake City. Robb says the community is “Active, vibrant, and scaling. Clearly, Salt Lake City and most all our major cities across the state are experiencing explosive entrepreneurial growth.”

SaltLake.png

Image courtesy @countylemonade on Flickr

As a result of this tremendous growth in developing new ventures, BoomStartup can only accept a limited number of portfolio companies each new cycle. Typically, they have two separate batches each year and invest $20,000 in exchange for .06% equity in each company. The program currently has open applications and is accepting them here until April 11th.

BoomStartup boasts a list of over 50 experienced mentors and runs a hands on program that has been listed as a Top 15 Accelerator in the country. With many other accelerators popping up (even in larger markets), Robb hasn’t ever felt like they have had to “compete” vs other startup accelerators across the country. He says, “We were a Charter Member of the Global Accelerator Network (GAN) http://gan.co/ along with TechStars and 7 other Accelerators to help share standards, best practices, applications and experiences to build a stronger global accelerator network around the world.” The response to BoomStartup has been exceptional in the Utah area. With more startup companies applying year over year, the brand is seeing good validation.

Once you’re in the program, it’s 3 months of hard work to bring your product to market.

“Companies in the program find ways to separate themselves usually with traction” Robb says. “We see this in three forms; revenue, users or investor funding- all three are good!”

Even though as an entrepreneur you may feel like you got the upper hand, you still need to be careful with what you get yourself into.

Robb says, “When we started BoomStartup more than four years ago, there were only 15 or so Tech Accelerators, and now we understand there are more than 1500..so thats 10x growth.  Entrepreneurs/Founders should be careful and do their due diligence before the apply to an Accelerator….just like Investors do before investing!

In order to win the game you must surround yourself with a community that is willing to help you grow. Next time you’re sitting alone in a coffee shop working on your big idea, consider applying for a startup accelerator like BoomStartup and increase your odds of success.

Too Many Entrepreneurs Don’t Know How To Pitch A VC: Don’t Be One Of Them

Too Many Entrepreneurs Don’t Know How To Pitch A VC: Don’t Be One Of Them

pitchImage courtesy of MDGovPics

We talk to a lot of entrepreneurs and hear them tell us first hand what it feels like to be turned down by a potential investor. And it’s always the same story. The founder thought they had it in the bag, their product was the next big thing, it was going to change so many lives. “Who wouldn’t want to invest?” they would think.

These types of first time entrepreneurs are everywhere. They’re at every local meetup, reading TechCrunch blog posts and chatting up their own comfortable, social circles. “Did you hear about company @*&^*# in Silicon Valley just raise $4mm in seed funding?” they say. The funding environment is hot and the money is all theirs for the taking!

It’s all too familiar. We have studied how these types of entrepreneurs articulate their value propositions, mission statements and reasons why they are business. In fact, we’ve hosted a free Pitch Clinic every month for the last two years to help wrap our head around the thought process. But there is still a disconnect! Why aren’t our entrepreneurs being given the pitching knowledge they need to succeed? That’s our mission, to simplify finance and help guide entrepreneurs along this journey.

I recently had the opportunity to interview Jeremy Banon over at Interplay Ventures based in New York City. Interplay has been involved in deals ranging from Coinbase to Warby Parker. They’re a fairly new firm and have a strong management team behind their fund. I asked Jeremy a handful of questions all around “pitching VC’s” and he delivered some very insightful information every entrepreneur ought to digest.

Lets begin where the entrepreneur typically starts.

Getting The Meeting

VC’s hear hundreds if not thousands of pitches a year. If you’re not getting a warm intro, it can be difficult to get their attention. For starters, when asked how to get a meeting with an investor, Jeremy said it can come in various ways, including the most valued, which is an intro from a portfolio founder. But there is also a much harder way. For instance, Jeremy says he “almost never takes cold calls from entrepreneurs, my first response will almost always be to send over a plan. As important time is to entrepreneurs, it’s just as valuable to a VC.” Entrepreneurs need to get to the point quickly, learn to articulate their message properly and master the art of brevity.

Do Your Homework

It’s easy to jump right into the game and start reaching out to every single person you think has money. However, that’s surely a quick way to fail. Jeremy gets pitched often from entrepreneurs who are eager to get funded. He says he has been pitched by just about anyone from Alaska to Vietnam and a large majority of these founders haven’t done their research into his firm’s investment strategy. A key point here is to do your homework and own due diligence on firms you’re approaching. Make sure you understand their investment philosophy and past investments. A good place to start is a portfolio section on their website or Crunchbase.

Do you watch the 60-90 second explainer videos entrepreneurs create?

“Almost always – for some reason, entrepreneurs seem to be better at getting to the point that away. Moreover, if the entrepreneur is featured in the video, it can give great insight into who he/she is as a person.”

researchPhoto courtesy of INPIVIC

The Pitch

Among one of the most important elements of a good pitch for Jeremy is ‘Clarity.’ “If if it takes me more than 5 minutes to figuring out what you’re pitching, you’ve failed with your deck and probably lost me.”

When delivering any type of presentation, a good storyteller will captivate an audience or in this case, the investors. How important is storytelling to you? “Not initially – to pass the eye test you must be delivering something that people already have/want but doing so easier and better. But before an investment is made or partnership solidified, I will definitely want to hear “the story”.

Does emotion play a factor?

“If I feel strongly about a certain vertical, I will be more inclined to move forward. If it’s a “enterprise collaboration platform” or a “big data/analytics service” or some of the other overkilled spaces, I will be less inclined to move forward.”

The Path to Funding

To make your pitch go from good to great. It’s important to have an experienced team that is driving the venture forward. Since ideas change frequently, many investors will make a bet on the jockey and not the horse. If you’re the founder of the venture, you need to be prepared to speak on behalf of your team at all times. This will take practice, but understanding your business and being able to articulate your vision will help you move the needle. In fact, Jeremy rarely listens to pitches that aren’t from a founder. “It’s certainly not the norm, as early stage companies are generally bootstrapped and doing most business functions themselves. In that way, it can give rise to suspicion as there are many individuals who attempt to do equity for fundraising help swaps. These are people we generally advise people to stay away from.”

At the end of the day, the founder needs to be ready to run a process while in fundraising mode. With all the moving parts from above & trying to run the business at the same time, fundraising can be tough. Be prepared and learn from what VC’s like Jeremy have to say. After all, it’s in everyone’s best interest to get a deal done with a promising startup.

For more advice follow Jeremy on Twitter and AngelList.

Jason

Teaser Videos for Easily Distracted Investors

30 October, 21.25Credit: Timo Arnall

According to Dave McClure, most investors have a short attention span. This is why we recommend using video in your presentation towards investors, especially when reaching investors online. When videos are used in crowdfunding campaigns and on AngelList or Gust, it is much easier to articulate your message quickly and in an effective manner. Using videos has become a trend, such that Angel Investors and Venture Capitalists such as Bain Capital Ventures Innovation Center encourages start-ups to pitch them virtually with videos.

“So when reviewing 20, 50 or 100 submissions for funding during the screening process, I have found that it is incredibly helpful to be able to watch a quick (2-3 minute) video elevator pitch so that I can get an instant gut feel for the entrepreneur and the company. I’ll be looking for all those same clues that I’d be watching for during an in-person meeting.” – David S. Rose, CEO of Gust

You don’t want to simply talk at the camera how you normally would in a presentation with investors. Understand and optimize video as a medium and use it to your advantage. Video is art, and in art, there are principles and rules.

“Show, don’t tell.” This simple rule in creative writing can be applied to any art medium. Show your passion and energy. Show who you are and your credibility. Show your product–even better, show people using your product and how it affects them, if possible, emotionally.  Show the story behind your start-up. DJZ and MUBI are good examples you can learn from.

Chip and Dan Heath discovered 6 principles that makes an idea stick–they call it SUCCESs, an acronym:

Simple — Simplicity isn’t about dumbing down an idea but finding the core of the message and prioritizing it

Unexpected —  Surprise the audience

Concrete — Get rid of abstractions and use sensory language

Credible — An idea is credible through outside authorities or from within with stats and details

Emotional — Focus on emotion rather than logic or numbers

Stories — Use a narrative to explore an idea

By applying these 6 principles, your video will be engaging and more influential. As for content, your video should let the investor know who you are, what problem you are solving, who the product benefits, and how you will implement your plan. For the problem and solution, consider this rhetorical question Dave McClure asks: ““How does your solution tap into the emotional, powerful, evolutionary needs that we as humans have?”

The purpose of your product will always be human driven and derives from emotions. Go on, tell your story with video and capture the attention of investors.